Archive for July, 2011

U.S. debt ceiling debate could impact Impinj IPO

Thursday, July 28th, 2011

A report from Credit Suisse this morning and carried by CNNMoney states that if the U.S. fails to raise the debt ceiling and defaults on its loans next week, the result could be a stock market tumble of one-third or more, and a contraction in the economy of five percent.

That’s bad news for everybody, but especially for companies like Impinj that are on the doorstep of going public. If the infighting over the U.S. debt continues, it’s entirely possible that capital for IPOs could dry up if the debt ceiling debate is not resolved quickly.

So you can’t blame the folks at Impinj for being a bit anxious as they prepare for the EPC solution provider’s IPO. Until recently, technology, social media and Internet IPOs were buzzing, with Internet high-flyers LinkedIn and Zillow seeing big gains on their opening day of trading. What’s to think that a hot RFID play with a great growth story wouldn’t have the same kind of debut?

If successful, Impinj would represent the first RFID pure play in the public markets. “Specifically, it would be the first EPC pure play, so the message clearly would be that the EPC market is coming on board quickly,” says one industry insider. A successful IPO “would definitely show that the core component of the industry – the tag and the reader — is a growing market and that there is a growing demand for it.”

But the stalemate in Washington, and the possibility of a U.S. default on Monday, could impact all IPOs going forward. As Washington continues to try and iron out a solution, the stock market endured losses this week until a modest turnaround today. Yesterday, ADS Tactical, Inc. (ADS) announced that it has terminated its IPO due to adverse market conditions. The company provides logistical services, mainly to the federal government.

“It’s a very dangerous situation right now, and anything remotely connected to the government, and the possibility of a temporary or perhaps permanent reduction in revenues, is turning people off,” says Scott Sweet, Senior Managing Partner at IPO Boutique. “That will be the case until there is a plan that seems workable, but at the moment it doesn’t seem as they are getting anywhere.”

Impinj might luck out in that its IPO is likely still six to eight weeks away, during which time the debt ceiling debate could be put behind us. Impinj filed its IPO in April, and its S1 was filed on the same day as Internet real estate firm Zillow, which went public this week. So that means Impinj could be getting close.

A successful Impinj IPO would be a stellar sign for the industry. Impinj is a relatively small company with sales of just under $32 million in 2010. However, the firm has a strong IP position and a very strong market position, and a successful IPO would enable Impinj to further advance the overall RFID marketplace through increased funds for R&D and marketing to develop new applications. Impinj has been very supportive of industry-wide application development, and a successful IPO would only enhance that.


Korean steelmaker to tag all products it produces; solution builds off worker safety program

Wednesday, July 27th, 2011

There are two interesting aspects to today’s news from UPM RFID that its RFID tags will be used to track more than two million steel components made each year by Korea-based POSCO. For starters, there is a quick scale to this project. Currently, the company is using RFID to identify coil products manufactured at its Kwangyang and Pohang plants in Korea for a small group of 17 customers. But starting in October, POSCO will tag all of the items it produces – more than two million.

In this case, return on investment might be the reason for such a quick ramp-up. POSCO says that the solution has reduced costs by $1.4 million (U.S.) per month.

The other interesting aspect is that the automated RFID-based solution, which is designed to improve the accuracy and efficiency of key operational processes, is being backed by funding from the Korean government as part of the nation’s drive to become a leader in the field of ubiquitous sensor networks.

The Korean government has already jump-started RFID tagging in the pharmaceutical industry by mandating that 50 percent of the drugs sold in that country carry RFID tags within five years.

POSCO, one of the world’s largest steelmakers, has implemented a proprietary RFID-based logistics solution that relies on custom UPM DogBone™ UHF RFID tags to track and trace multi-ton metal coil products from the manufacturing process through customer delivery.

Implementing RFID technology in steel mills poses unique challenges, as the pervasive metal environment interferes with RF signal readability. POSCO used its experience implementing an RFID-based worker safety program in 2009 to design its own logistics system and ensure it integrated seamlessly with its existing manufacturing systems.

The company is using modified UPM DogBone™ UHF tags that have two antennas and are applied upright inside heavy metal coils tags as flag tags, perpendicularly to the items’ curved surfaces. Positioning the tags thus solves the problem of readability, while enabling POSCO to capitalize on UPM DogBone™ paper-based tags’ superior performance and cost-effectiveness for large-scale inventory deployments.

Metal coils are tagged during the packaging process, and items are read when they are moved by cranes to the warehouse, during storage and again when they are readied for shipment.?POSCO’s RFID system is comprised of UPM DogBone™ UHF tags, hand-held industrial PDAs, fixed RFID readers placed attached to cranes and placed at factory gates, enterprise resource planning and manufacturing execution systems and a server.

Because the RFID system integrates with customers’ own planning solutions via the Internet, they can access real-time information on POSCO products, using data to plan and fine-tune their own production operations.

By implementing the RFID-based logistics system, POSCO has automated the inspection, packaging and shipping of its metal coil products. In addition to providing complete traceability of company products, the RFID system has decreased packaging and shipping errors and improved customer satisfaction.

New study reveals increased RFID adoption

Wednesday, July 20th, 2011

A survey of more than 100 companies reveals that 34 percent of organizations are using, piloting, or already in the process of implementing RFID technology – representing a 21 percent increase over a similar study conducted by CYBRA Corp. in 2008.

Greater inventory accuracy, increased profits and improved efficiencies were the three primary reasons mentioned for deploying the technology. Of those using or implementing the technology, 80 percent say they will do so because of  EPC (Electronic Product Code) compliance issues and also to maximize profits.

Improved inventory accuracy (60 percent) and EPC Compliance (55 percent) remain the top two business drivers for RFID adoption. Those who cited EPC compliance as a driver for deployment (24 percent) also cited item level tagging as a current initiative.

Almost half of survey respondents say that the ROI is now less than two years due to reduced labor costs from RFID, much improved inventory accuracy, and the fact that software, tags, and hardware are now less expensive.

Click here to view the entire report.

Tomorrow, we write about an exciting new asset tracking application.

Global demand for RFID tags nears $2B in 2010; 47 billion tags will be in use by 2015

Tuesday, July 19th, 2011

Global demand for RFID tags exceeded $1.9 billion in 2010, a value that is expected to more than triple within the next five years. Unit volumes are anticipated to increase more than 10-fold during the same forecast period, growing from 4.3 billion tags in 2010 to more than 47 billion by 2015.

According to VDC Research, the trends behind this market growth include, but are not limited to:

  • Scaling of existing projects in a diversity of markets and applications
  • Decreased pilot-to-deployment time and an increased level of commitment
  • A deeper understanding of the technology’s value propositions and limitations
  • More attractive price/performance levels and simplified investment justification
  • Deep integration and continued convergence with legacy systems
  • A continued push for adoption throughout value chains

Although approximately 50 percent of all global transponder revenues are derived from two verticals — transportation and government (primary applications are supply chain, asset tracking, security/access control and ID) — the rapid evolution and scaling within the retail sector is expected to dramatically alter the vertical landscape.

Retail accounted for less than 10 percent of all tag revenues in 2010; however, by 2015, the retail sector is expected to represent nearly 30 percent of total global revenues. Click here to read RFID 24-’s previous coverage on RFID and retail.

Click here to read the full VDC executive summary.

Is cash still king?

Monday, July 18th, 2011

Is this the beginning of the end for cash? Maybe so. In an indication that contactless payment continues to gain acceptance in North America, U.S. Bank, a division of U.S. Bancorp, introduced its VITAband payment system this week, a wristband that combines contactless payment technology with emergency contact and medical information.

The RFID-enabled wristband allows tap and go payments while also holding key medical information.

The VITAband allows customers to simply “Tap & Go” when making purchases at merchant locations that accept contactless payments. It also links to a customizable Emergency Response Profile (ERP) that provides medical professionals with fast access to critical medical information in the event of an emergency.

U.S. Bank employees began testing the VITAband in multiple states in the second quarter of 2011, making U.S. Bank one of the first major card issuers in the U.S. to pilot this new technology.

U.S. Bank is partnering with MasterCard Worldwide, Vita Products, Inc., Oberthur Technologies and FIS to provide the wristband that combines advanced financial management and universal health record technology.

“U.S. Bank MasterCard PayPass VITAband is great for sports enthusiasts or people who are on-the-go and don’t want the hassle of carrying cash and identification. It provides contactless payment functionality, along with access to emergency contact and medical information, all in one convenient wristband,” said Beth Blaisdell, senior vice president for U.S. Bank Payment Services

RFID and social media give firms new supply chain and marketing visibility

Thursday, July 14th, 2011

RFID is well touted as a tool to increase supply chain visibility and provide real-time updates on the whereabouts of critical assets.

In today’s mobile world of smart phones and need-it-now access, RFID is quickly becoming known as a visibility tool of another sort – one that allows people to communicate instantaneously with each other, providing vacation updates from around the world, for example.

Those with hint of nostalgia might opt for writing a postcard that will arrive a week later, but those living in a highly connected mobile world are rapidly embracing the combination of RFID and Facebook to allow friends and family to view photos and news updates instantly.

Vail Resorts and Great Wolf Lodge are two entertainment venues that have deployed an RFID-based system to allow visitors to share information. Many more venues, from concerts to conventions, are planning similar deployments.

“The ability to create this virtual overlay on a physical event has great marketing value and provides a terrific engagement for guests,” says Patrick Sweeney, founder and CEO of ODIN RFID, whose EasyConnect software powers Vail’s EpicMix system that was utilized by more than 100,000 skiers last winter.

EpicMix, which utilizes an RFID-enabled ski pass with readers placed throughout Vail’s five resorts, was offered to season pass and multi-day pass holders last winter, with an adoption rate of 15 percent. This coming ski season, the program will be offered to all skiers.

Last year’s top EpicMix skier logged 171 ski days and skied more than 7.2 million vertical feet, earning the top spot on the EpicMix leader board. Of the 100,000 users, 45 percent of EpicMix accounts are public, meaning that guests volunteer to share skiing statistics with friends and family on social media sites like Twitter and Facebook. According to its web site, EpicMix generated 275,000 social posts and over 35 million social impressions (based on Facebook’s estimate of 130 friends per user). Also, EpicMix drove 1.7 million web and mobile visits last ski season.

“The big number for us is 35 million positive social media impressions,” says Robert Urwiler, chief information officer for Vail Resorts. “That’s a big deal to us because it increases the resort’s visibility in the social media space. This is a way for not just the resort to talk about itself but for guests to brag about their experience. We’ve created 100,000 brand advocates bragging about the experience they had at one of the Vail resorts. That’s pretty powerful.”

EpicMix leverages RFID installed at each of the company’s 89 lifts across its five mountain resorts and RF chips embedded in lift tickets. Urwiler says that 170 readers and 1,300 antennas comprise the current system. The resort has issued hundreds of thousands of RFID tags for the program, a number that will only grow as the recently acquired Northstar ski area is brought online and as more skiers sign on with EpicMix.

The system allows guests to track vertical feet skied and days on the mountain, and lets skiers share their experiences with family and friends on Facebook and Twitter. The free EpicMix mobile app alerts skiers when their Facebook friends are on the mountain, and can be used to send private messages, eliminating the always frustrating task of locating skiing partners on the hill.

Guest location services was also the primary objective of the initial RFID deployment at Great Wolf Resorts, which also uses the technology embedded on visitor wristbands as guest room keys and in-house charge accounts.

After check-in, guests at Great Wolf can register their wristband at the Great Wolf Connect kiosks and link it directly to their Facebook account. Then, at five Paw Posts located throughout the resort, guests can scan their wristband and smile for the digital camera at each spot. That photo – or a general photo of each attraction – and a caption are then automatically posted on their Facebook wall.

“Guests have been asking us for photo sharing functionality for quite some time. Great Wolf Connect allows us to expand our technology infrastructure in a way that enhances their stay,” says Great Wolf chief information officer Rajiv Castellino. “In Grand Mound, we’ve already seen our guests embrace this new experience. And as guests see others capturing memories at the Paw Posts, they’re trying it out for themselves, too.”

The solution is ideal for Great Wolf, which operates indoor water parks that can be difficult for guests to capture vacation moments due to the possibility of damaging camera and video equipment from water exposure.

The Paw Post locations include the most popular photo opportunities throughout the resort, including the resort’s signature Tipping Bucket as well as a full view of the of the waterpark from an elevated balcony inside the waterpark, and the Great Clock Tower in the lobby.

The Walt Disney company is also investigating RFID for a variety of use cases. According to the Epcot Explorer’s Encyclopedia, a web site that provides updates on everything Disney related, Disney sent out surveys to its park guests in June to gauge their reaction to RFID. The site says that Disney is considering RFID for everything from wristband admittance to pre-registration of guest information assigned to the wristband that would allow the theme parks to custom tailor a guest’s visit, such as character interactions and ride options.

Urwiler thinks we’re just seeing the tip of the iceberg when it comes to RFID and social media.

“This all surfaced pretty quickly and I think there is another wave coming with these NFC-enabled mobile devices,” says Urwiler. “Think about the implications of mobile phone manufacturers building readers and tags into every device, and then the innovative app developers who will inevitably develop tools to interact with social media in ways we have not even seen yet. So the proliferation of tags and readers to the general consumer versus back office uses like supply chain will produce a wave of innovation that is pretty exciting.”

Prosthetics market represents a multi-million tag market for RFID

Tuesday, July 5th, 2011

Research is evolving rapidly when it comes to using RFID technology in the medical and healthcare community. This week, researchers from the University of Cincinnati unveiled the results of their research about using RFID in the internal hospital supply chain. The data shows that hospitals can save at least 18 percent in labor costs by utilizing RFID to simplify manual re-stocking tasks.

And researchers at the University of Pittsburgh have developed a system that will soon allow RFID tags to be embedded on prosthetics like replacement knees and hips to provide better tracking of product recalls, infections, and routine follow-up exams.

While item level tagging at the retail level is exploding, the opportunities on the horizon in healthcare could thrust the technology to ubiquitous status in the medical and hospital environments.

The healthcare sector is expected to see dramatic growth when it comes to the use of RFID. While global shipments of RFID transponders in healthcare totaled 113 million units in 2010, that number is expected to climb to 185 million units this year. By 2015, VDC Research expects that the healthcare market will consume 884 million RFID tags, representing annual growth of just over 50 percent. It’s important to note that healthcare does not include pharmaceutical goods, another sector experiencing rapid growth.

As for the tagging of medical implants, University of Pittsburgh researchers predict that several million tags could be used in two to three years. Nearly 750,000 Americans have knee or hip replacement surgery each year, an indication of how big the global market is for tagging medical implants. Dr. Marlin Mickle, a professor of electrical and computer engineering in Pitt’s Swanson School of Engineering, and one of the researchers in charge of developing the RFID readers to be used with the tags, says that the RFID implant system could be up and running by the end of the year. First, it must gain FDA approval, a process that could take six months.

“Tagging of implantable medical devices can provide tremendous value to the manufacturer, healthcare professionals and patients, especially when integrated with sensor technology,” says Drew Nathanson, director of research operations at VDC Research. “Leading uses include identification of the device and the healthcare professionals who installed it and maintained it, and device and patient health. We are only at the beginning … there is significant potential in this market.”

The technology developed at the University of Pittsburgh uses human tissue instead of air as a conduit for radio waves. The noninvasive system, known as Ortho-Tag, features a wireless chip attached to the implant and a handheld reader that would allow physicians to view critical information about artificial knees, hips, and other internal prosthetics — as well as the condition of the surrounding tissue — that currently can be difficult to track.

The RFID tag would have information about the patient, the implant, and the procedure uploaded to it prior to an operation, says New Jersey-based orthopedic surgeon Lee Berger, the CEO of Ortho-Tag, Inc., and inventor of the tagged implant. In addition, sensors within the chip would gauge the pressure on the implant, the chemical balance and temperature of the tissue, and the presence of harmful organisms, which would allow potential infections to be treated before they become serious.

Infection control and prevention is likely to be the first and largest ROI area when the system is put in place. “The biggest problem with failures are the ones that become infected because that turns into a six-figure problem for the hospital,” says Mickle. “The hospital has to take it out and there is a lot of patient discomfort, so that is likely to be the first place where the benefit shows up.”

Berger says that the Ortho-Tag will likely be attached to implants by device manufacturers. He is currently negotiating with three implant manufacturers. Ortho-Tag would distribute the software and probe to physicians. For people with existing orthopedic devices, the company is considering producing wallet-sized cards with an affixed RFID tag uploaded with information about the patient and the implant, Mickle said.

“There has to be accountability for objects implanted in the body, and we hope that this technology will finally make orthopedic devices much easier to monitor and, thus, safer for patients,” says Mickle.

The University of Cincinnati analysis of hospital supply chains — how hospitals stock nursing stations with hundreds of medicines, materials and even office supplies — reveals that RFID could improve efficiencies by 18 percent.

The research, to be presented on June 22 at the Institute for Operations Research and Management Science Healthcare Conference in Montreal, has implications for affecting the significant costs associated with hospital supplies. On average, the study says that supplies and inventory account for 30 to 40 percent of an average hospital’s budget.

Using RFID in re-stocking procedures could also result in an average 38 percent reduction in the need for out-of-cycle replenishment, or “we need it now” emergencies, which are costly in terms of labor and time usage by employees, not to mention a potential risk for patients.

“Hospitals want to hit the right balance of sufficient, but not too many supplies,” says Claudia Rosales, a recently graduated doctoral student in quantitative analysis now at Michigan State University. “Keeping unnecessary levels of inventory can increase costs significantly. But lack of sufficient inventory may hinder patient care and disrupt nursing activities. So, there’s a cost associated with that too.”